Calicut University Curriculum Compliance — Module II Overview

Course Code: COM6EJ308(4) • Course Title: Computerized Accounting with Tally • Semester: VI • Credits: 4 • Contact Hours: 60
Module II Title: INTEGRATION OF ACCOUNTING WITH INVENTORY & FINANCIAL REPORTING (15 Contact Hours)
Syllabus Units Covered: Unit 2: Bill-wise Details — New Ref, Agst Ref, Advance, On Account, Accounts Receivable & Payable Management • Invoicing Modes — Item Invoice, Accounting Invoice, Voucher Mode • Cost Centres & Cost Categories — Multi-Dimensional Expense Allocation • Budgetary Controls — Setting Budgets, Variance Analysis Reports • Bank Reconciliation — Auto Bank Reconciliation & Manual Clearing Dates • Interest Calculation — Simple & Compound Interest on Overdue Debts • Order Processing — Purchase & Sales Order Cycles • Bill of Materials (BOM) — Manufacturing Journal & Production Costing • Accounting & Inventory Reports — Balance Sheet, Profit & Loss A/c, Ledgers, Stock Summary, Godown Reports • Managerial Decision Tools — Ratio Analysis, Cash Flow Statement (AS-3), Funds Flow Statement • Calicut University Academic Examination Bank (Part A: 2 Marks, Part B: 5 Marks, Part C: 10/15 Marks).

1. Overview: The Symbiosis of General Ledgers and Material Inventory

In simple service firms, accounting operates strictly in monetary terms. However, in trading, retail, and manufacturing enterprises, financial health is intimately bound to the physical movement of inventory. Integrating accounting with inventory ensures that every material movement—from receiving raw materials at a warehouse loading bay to dispatching finished goods—is dynamically mirrored in the financial ledgers.

When an item invoice is passed in Tally, the software simultaneously executes dual updates: it debits or credits trade party ledgers, recognizes revenue or expenditure, adjusts GST tax accounts, and recalibrates inventory quantities, godown stock balances, and Cost of Goods Sold (COGS) using automated valuation methods (FIFO, Weighted Average, Standard Cost). Module II explores the advanced managerial and analytical modules of Tally: Bill-wise debt tracking, Cost Centres, Budgets, Bank Reconciliation, Manufacturing BOMs, and dynamic Ratio Analysis.

The Four Advanced Integrated Dimensions of Tally Prime Module II Architecture

1. BILL-WISE & INVOICING CONTROLS

• The 4 Bill Reference Methods: New Ref, Agst Ref, Advance, and On Account.
• Credit Monitoring: Credit days limits, interest on overdues, and aging schedules.
• Invoicing Modes: Item Invoice (goods) vs. Accounting Invoice (services).

2. COST & BUDGETARY ALLOCATION

• Cost Categories & Centres: Departmental, project, and branch expense tracking.
• Budgeting & Controls: Setting corporate budgets and tracking variances.
• Bank Reconciliation (BRS): Matching electronic bank statements with cash books.

3. ORDER CYCLES & BILL OF MATERIALS

• Complete Order Cycles: PO → Receipt Note → Purchase → Payment.
• Bill of Materials (BOM): Formulating standard raw material consumption recipes.
• Manufacturing Journal: Converting raw components into finished stock assemblies.

4. EXECUTIVE REPORTING & RATIOS

• Statutory Financials: Vertical/Horizontal Balance Sheets and P&L Statements.
• Inventory Analytics: Stock Summary, Godown Registers, and Movement Analysis.
• Decision Support: Real-time Ratio Analysis, Cash Flow (AS-3), and Funds Flow.

2. Bill-Wise Accounting and Invoicing Mechanics

A. The Four Bill Reference Methods in Tally

When 'Maintain Bill-wise Details' is enabled for Sundry Debtors and Sundry Creditors, every credit transaction prompts the accountant to assign one of four reference types:

Reference Type	Operational Trigger	Commercial Accounting Function & Behavior
New Ref (New Reference)	Passed during new credit sales (F8) or credit purchases (F9).	Creates a fresh, unique invoice tracking ID (e.g., `INV/2024/042`) with associated credit period (e.g., 30 days) and due date.
Agst Ref (Against Reference)	Passed during payment receipt (F6) or supplier payment (F5), and Debit/Credit notes.	Presents an interactive pop-up window of pending unpaid bills. Linking the payment to a specific invoice settles that liability in the aging ledger.
Advance	Passed when receiving or paying money upfront prior to invoice generation.	Records an unadjusted advance payment. When the final invoice is billed later, it is adjusted against this advance via `Agst Ref`.
On Account	Passed when an interim payment cannot be tied to a specific invoice number.	Reduces the overall party balance without clearing individual invoice line items in the outstanding debt aging schedule.

B. Invoicing Modes in Tally (Ctrl+H Toggle)

Tally provides three distinct operational modes for entering sales and purchase vouchers:

Item Invoice Mode: Standard mode for trading enterprises. Contains tabular columns for Name of Item, Godown, Quantity, Rate, Unit, and Amount, alongside automated tax ledgers (CGST, SGST, IGST).
Accounting Invoice Mode: Tailored for service providers (consultants, advertising agencies, legal firms). Omits inventory columns and presents Particulars (service ledgers) and Amount.
As Voucher Mode: The traditional double-entry journal format presenting classic Dr (Debit) and Cr (Credit) rows without automated invoice formatting.

3. Cost Centres, Budgets, Bank Reconciliation & Interest Calculations

A. Cost Categories and Cost Centres

In corporate management, executives must analyze expenses and revenues by department, branch, or project without cluttering the general ledger with hundreds of separate accounts:

1. COST CATEGORY (PRIMARY CLASSIFICATION)

• Definition: Represents the broad analytical dimension or parallel allocation perspective.
• Examples: "Departments", "Regional Branches", "Client Projects".
• Parallel Tracking: A single salary payment can be simultaneously allocated 100% to a Department and 100% to a Branch.

2. COST CENTRE (SPECIFIC ALLOCATION UNIT)

• Definition: The specific organizational unit, branch, or executive incurring the cost.
• Examples: Under Departments: Marketing, Accounts, Production; Under Branches: Kochi, Calicut, Trivandrum.
• Execution: During voucher entry, Tally prompts the user to distribute the voucher amount across cost centres.

B. Budgetary Controls and Variance Analysis

Tally enables management to formulate corporate budgets for specified timeframes (monthly, quarterly, annual):

Ledger Budgets: Imposing spending ceilings on specific indirect expense ledgers (e.g., capping Traveling Expenses at ₹2,50,000 for Q1).
Cost Centre Budgets: Allocating total operational expenditure budgets to specific branch cost centres.
Budget Variance Report: Compares Budgeted Expenditure against Actual Expenditure, calculating positive and negative variances (over-budget variances flagged for administrative action).

C. Bank Reconciliation Statements (BRS) in Tally

Automated & Manual BRS Workflow in Tally Prime
1. Navigation: `Gateway of Tally → Banking → Bank Reconciliation` → Select Bank Ledger (e.g., SBI Current A/c).

2. Bank Date Reconciliation: Tally displays all un-reconciled vouchers. The accountant enters the actual clearing date from the physical bank passbook in the Bank Date column. The instant a date is entered, the voucher reconciles.

3. Auto Bank Reconciliation: Users import electronic bank statement files (.xlsx, .csv, .mt940). Tally automatically executes algorithmic matching of cheque numbers, dates, and amounts, instantly reconciling identical entries and highlighting unexplained variances.

D. Automated Interest Calculation

Tally automates the computation of interest on outstanding customer balances:

Simple & Compound Interest: Configured in ledger masters under F11 features. Users specify the interest rate (e.g., 18% p.a.), calendar year basis (365 days or 360 days), and grace period.
Debit Note Generation: Overdue interest reports calculate exact accrued interest up to any date, allowing the accountant to generate automated interest Debit Notes to bill defaulting debtors.

4. Order Processing Cycles & Bill of Materials (BOM)

A. The Integrated Order Processing Cycles

In advanced trade environments, financial vouchers are preceded by formal commercial order tracking:

Stage	The Procurement (Purchase) Cycle	The Fulfillment (Sales) Cycle
1. Order Placement	Purchase Order (Ctrl+F9): Issues formal order to vendor specifying agreed quantities, rates, and delivery dates.	Sales Order (Ctrl+F8): Receives order from customer agreeing to supply specified goods.
2. Physical Movement	Receipt Note (Alt+F9): Warehouse storekeeper certifies physical arrival of goods; inventory increases without affecting financials.	Delivery Note (Alt+F8): Goods dispatched from warehouse accompanied by delivery challan; inventory decreases.
3. Rejection / Return	Rejections Out: Returning damaged units before invoice billing.	Rejections In: Customer returns rejected goods before billing.
4. Financial Invoicing	Purchase Invoice (F9): Links to Receipt Note number; automatically populates items and updates vendor liability.	Sales Invoice (F8): Links to Delivery Note number; bills customer and recognizes sales revenue.
5. Settlement	Payment Voucher (F5): Settles invoice balance via `Agst Ref`.	Receipt Voucher (F6): Collects payment from customer via `Agst Ref`.

B. Bill of Materials (BOM) and Manufacturing Costing

A Bill of Materials (BOM) defines the exact standard technical recipe of raw materials, packaging components, and sub-assemblies required to manufacture one unit of a finished product:

1. BOM DEFINITION IN ITEM MASTER

• Finished Product: E.g., "Executive Office Desk" (1 Unit).
• Raw Material Recipe: Engineered Wood: 2.5 Sq.Mtrs; Steel Screws: 40 Nos; Industrial Adhesive: 0.5 Kg; Edge Banding: 8 Mtrs.

2. MANUFACTURING JOURNAL (ALT+F7)

• Source (Consumption): Specifying production of 50 Desks automatically draws and deducts 125 Sq.Mtrs of wood and 2,000 screws from the raw materials godown.
• Destination (Production): Adds 50 finished desks to the showroom godown, automatically absorbing direct labor and power overheads into the finished unit cost.

5. Financial, Inventory & Managerial Decision Reports

A. Core Accounting and Financial Reports

Tally generates standard financial statements dynamically from the relational ledger database:

Balance Sheet (F10 / GOT → Balance Sheet): Displays capital liabilities on the left and assets on the right (or vertical format). Pressing Alt+F1 expands all primary groups into detailed sub-groups down to individual ledger balances.
Profit & Loss Account: Structured into upper Trading Account (Gross Profit derived from Sales, Purchases, Opening/Closing Stock, and Direct Expenses) and lower P&L Statement (Operating Net Profit after deducting indirect overheads).
Trial Balance: Displays closing debit and credit balances of all 28 groups. Pressing F12 configures opening balances, periodic transactions, and closing balances simultaneously.

B. Managerial Decision Tools (Ratio Analysis, Cash Flow, Funds Flow)

Analytical Tool	Key Metric Calculated in Tally	Executive Decision Significance
Ratio Analysis (GOT → Ratio Analysis)	Current Ratio, Quick Ratio, Debt-Equity Ratio, Inventory Turnover, Gross Profit %, Net Profit %.	Provides an instantaneous real-time financial health dashboard; flags liquidity crunches (Current Ratio < 1.33) and sluggish inventory rotation.
Cash Flow Statement (AS-3)	Segregates cash movements into: (1) Operating Activities; (2) Investing Activities; (3) Financing Activities.	Reveals whether net profit is translating into physical bank liquidity or locked in uncollected debtor receivables.
Funds Flow Statement	Tracks changes in Working Capital and identifies long-term Sources and Uses of funds.	Audits whether short-term working capital borrowings were misapplied to finance long-term fixed assets.

6. Practical Empirical Case Studies

Case Study 2.1: Resolving Accounts Receivable Aging Crisis via Bill-Wise Details

Enterprise Context: A wholesale pharmaceutical distributor in Thrissur suffered severe cash flow bottlenecks with over ₹45 Lakh in overdue receivables.

Tally Implementation: Activated Bill-wise Details and set strict 21-day credit periods on customer ledgers.

Generated the Bills Outstanding Report (GOT → Statement of Accounts → Outstandings → Receivables) using F12 Aging by Due Date (0–15 days, 16–30 days, 31–60 days, 60+ days).
Discovered that 6 hospital clients accounted for 72% of debts overdue beyond 60 days. Tally's credit limit controls automatically blocked new sales invoicing to these accounts until outstanding invoices were cleared via Agst Ref, accelerating debtor recovery by 34%.

Case Study 2.2: Automated Production Costing via Bill of Materials in a Furniture Factory

Context: A modular kitchen manufacturing unit in Ernakulam struggled with inaccurate manual cost estimates for custom kitchen installations.

BOM Automation: Created distinct Bill of Materials recipes in Tally Prime for 5 modular cabinet lines, capturing exact consumption of plywood, hinges, handles, and laminates.

Executing the Manufacturing Journal automatically deducted inventory from raw material godowns and allocated 15% labor overheads, establishing true per-unit production cost and eliminating product under-pricing.

7. Calicut University Academic Examination Bank

Exhaustively curated for Calicut University B.Com Semester VI Elective: Computer Applications — COM6EJ308(4): Computerized Accounting with Tally (CUFYUGP 2024 Regulations). Specially formatted for superior academic performance.

Question 1 [Part A - 2 Marks]Bill Referencing

Name the four methods of bill reference in Tally Prime. State when 'Agst Ref' is utilized.

Standard Academic Answer:
The four bill reference methods are: (1) New Ref; (2) Agst Ref; (3) Advance; (4) On Account.
Agst Ref (Against Reference) is utilized when recording a payment receipt (F6) or payment disbursement (F5) to settle an existing pending invoice.

Question 2 [Part A - 2 Marks]Invoicing Modes

Distinguish between 'Item Invoice' mode and 'Accounting Invoice' mode in Tally.

Standard Academic Answer:
Item Invoice mode includes inventory columns (Item Name, Godown, Quantity, Rate, Amount) for trading physical goods. Accounting Invoice mode omits inventory details and is used by service providers to bill professional charges, rent, or consultancies directly to ledgers.

Question 3 [Part A - 2 Marks]Cost Tracking

What is the distinction between a 'Cost Category' and a 'Cost Centre'?

Standard Academic Answer:
A Cost Category represents the broad classification dimension (e.g., "Departments" or "Branches"). A Cost Centre is the specific functional unit or project under that category (e.g., "Marketing Department" or "Kochi Branch") to which income or expenditure is allocated.

Question 4 [Part A - 2 Marks]Manufacturing Setup

What is a 'Bill of Materials' (BOM) in Tally? In which voucher is it executed?

Standard Academic Answer:
A Bill of Materials (BOM) is a master recipe listing the standard quantities of raw materials and components required to produce one unit of a finished product. It is executed in a Manufacturing Journal Voucher (a specialized form of Stock Journal, Alt+F7).

Question 5 [Part A - 2 Marks]Banking Utilities

How does entering the 'Bank Date' reconcile a voucher in Tally's BRS screen?

Standard Academic Answer:
Entering the 'Bank Date' records the actual calendar date on which the cheque or online transaction cleared in the physical bank statement. Tally immediately clears that voucher from the un-reconciled variance list and updates the reconciled bank balance.

Question 6 [Part A - 2 Marks]Procurement Cycles

What is the operational difference between a 'Receipt Note' (Alt+F9) and a 'Purchase Invoice' (F9)?

Standard Academic Answer:
A Receipt Note records the physical arrival and inspection of goods at the warehouse, increasing physical stock without affecting financial accounting ledgers. A Purchase Invoice records the financial bill, creating the monetary accounts payable liability to the supplier.

Question 7 [Part A - 2 Marks]Decision Analytics

State two key financial ratios displayed on the 'Ratio Analysis' screen in Tally.

Standard Academic Answer:
(1) Current Ratio (Current Assets / Current Liabilities); (2) Inventory Turnover Ratio (Cost of Goods Sold / Average Stock).

Question 8 [Part B - 5 Marks]Bill-Wise Dynamics

Explain the complete operational mechanics of 'Bill-Wise Details' in Tally Prime. Detail the four reference types and explain how they prevent aged bad debts.

Structured Model Answer:
Operational Mechanics:
When activated in Sundry Debtors and Creditors ledgers, Bill-wise accounting tracks every credit invoice as an independent liability unit rather than maintaining a single running lumped balance.
The Four Reference Types:
1. New Ref: Generates a unique tracking reference number for each fresh sales or purchase invoice with credit period terms (e.g., Bill #101 due in 30 days).
2. Agst Ref: Applied during payment receipts or disbursements, linking payments directly to specific open invoices, clearing them from the aging register.
3. Advance: Records unallocated advance deposits collected from clients before goods dispatch, later knocked off against the final invoice.
4. On Account: Interim payments recorded without bill tagging when specific invoice details are unavailable.
Prevention of Bad Debts: Tally generates dynamic Bills Outstanding Aging Reports (0–30, 31–60, 60+ days) and enforces automated credit limit locks, blocking new sales orders to defaulting clients whose credit days have expired.

Question 9 [Part B - 5 Marks]Cost Centre Management

Describe the procedure of configuring 'Cost Categories' and 'Cost Centres' in Tally. Provide a business scenario demonstrating how a company tracks administrative expenses across branches.

Structured Model Answer:
Configuration Procedure:
1. Enable Maintain Cost Centres under F11 Company Features.
2. Navigate to Gateway of Tally → Create → Cost Category → Create category (e.g., "Regional Branches").
3. Navigate to Create → Cost Centre → Select parent category "Regional Branches" and create centres: "Kochi Branch", "Calicut Branch", "Kannur Branch".
4. In expense ledgers (e.g., Staff Traveling Expense), ensure "Cost Centres are applicable" is set to Yes.
Business Scenario Demonstration:
Suppose the head office pays ₹60,000 for traveling expenses via bank cheque. In the F5 Payment voucher, upon selecting Traveling Expense A/c for ₹60,000, Tally displays a pop-up sub-form prompting cost allocation. The accountant enters: Kochi Branch: ₹25,000; Calicut Branch: ₹20,000; Kannur Branch: ₹15,000. Tally posts the single monetary debit while updating three independent cost centre profitability reports simultaneously.

Question 10 [Part B - 5 Marks]Manufacturing & BOM

Detail the step-by-step process of setting up a 'Bill of Materials' (BOM) and executing a 'Manufacturing Journal Voucher' in Tally Prime.

Structured Model Answer:
Step 1: BOM Configuration in Item Master:
Navigate to Create → Stock Item → Create finished product (e.g., "Packaged Fruit Juice 1 Liter"). Press F12 and enable Set Component List (Bill of Materials). Set Alter Components (BOM) to Yes. Enter BOM Name (e.g., "Standard 1L Recipe"), unit of manufacture = 1 Liter. List components: Raw Fruit Pulp = 0.4 Kg; Purified Water = 0.6 Liter; Sugar = 0.08 Kg; TetraPak Carton = 1 No.
Step 2: Manufacturing Voucher Type Setup:
Navigate to Create → Voucher Type → Create "Manufacturing Journal", select Type of Voucher = Stock Journal, and set "Use as a Manufacturing Journal" to Yes.
Step 3: Executing Production (Alt+F7):
Open Manufacturing Journal, select Product = "Packaged Fruit Juice 1L", enter Quantity to Produce = 500 Liters. Tally automatically calculates and populates the exact raw materials consumed on the left (Source) side, deducting them from inventory. On the right, direct labor and packaging costs are added, computing the exact manufacturing unit cost dynamically.

Question 11 [Part C - 10 Marks]Comprehensive Integration & Reporting Essay

Critically examine the integration of Accounting and Inventory in Tally Prime. Discuss how the seamless interaction between sales orders, delivery notes, invoicing, multi-godown stock valuation, and managerial decision reports (Ratio Analysis, Cash Flow Statement) streamlines enterprise financial governance.

Structured Comprehensive Essay Framework:
1. Introduction & The Concept of Unified Enterprise Accounting:
Traditional business software historically operated disjointed islands of data: warehouse stock was tracked in standalone inventory sheets while financial transactions were entered in independent general ledgers. Tally Prime's integrated architecture unifies financial accounting with material inventory into a single relational ecosystem.
2. End-to-End Order Processing Integration:
• Order-to-Cash Cycle: Tracking sales orders through Delivery Notes (updating physical inventory) to final Sales Invoicing (updating customer receivables and revenue ledgers), eliminating duplicate data entry.
• Procure-to-Pay Cycle: Tracking purchase orders through Receipt Notes to final Purchase Invoices, enforcing strict three-way quantity and price matching.
3. Real-Time Multi-Location Inventory & Costing:
• Tracking inventory across distributed godowns via Stock Journals (Alt+F7) enables multi-branch visibility.
• Automated inventory valuation rules (FIFO, Weighted Average, Last Purchase Cost) immediately update the Cost of Goods Sold in the Trading Account, reflecting true gross margins.
4. Executive Decision Support & Analytical Reporting:
• Ratio Analysis: Instantaneous calculation of liquidity, working capital turnover, and operating margins without manual spreadsheet formula drafting.
• Cash Flow Statement (AS-3): Segregating operating, investing, and financing cash flows, exposing whether accounting net profits are tied up in delinquent trade receivables.
• Budget Variance Tracking: Enforcing operational discipline across departments by monitoring expenditure against pre-approved budgets.
5. Conclusion:
The complete integration of accounting and inventory in Tally Prime empowers management with total operational visibility, tighter working capital controls, and robust audit compliance.

Question 12 [Part C - 15 Marks]Practical Bill-Wise & Manufacturing Problem

(a) ABC Electronics sold goods worth ₹1,50,000 to M/s Modern Retailers on 1st May 2024 on 30 days credit (Invoice #201). On 10th May, Modern Retailers returned damaged goods worth ₹15,000. On 20th May, Modern Retailers paid an advance of ₹35,000. On 30th May, they settled the remaining balance via SBI NEFT. Show the step-by-step Tally voucher entries (specifying Voucher Type, Bill Reference method, and Ledger Debits/Credits) for all four transactions.
(b) A manufacturing unit produces 'Office Chairs'. The Bill of Materials (BOM) for 1 Chair requires: Steel Frame: 1 No @ ₹400; Molded Foam: 1 No @ ₹250; Fabric: 1.5 Mtrs @ ₹100/Mtr; Castor Wheels: 5 Nos @ ₹30/No. Direct labor cost is ₹80 per chair. Detail the Manufacturing Journal voucher entry for producing 100 Office Chairs, calculating total raw material cost, additional costs, and finished cost per chair.

Structured Model Answer:
Part (a): Bill-Wise Transaction Accounting Sequence:
1. 1st May 2024: Credit Sales of ₹1,50,000 (Invoice #201):
• Voucher Type: F8 (Sales Voucher).
• Debit: M/s Modern Retailers A/c → ₹1,50,000 [Bill Ref: New Ref: INV-201, Credit Period: 30 Days].
• Credit: Sales A/c → ₹1,50,000.

2. 10th May 2024: Sales Return of Damaged Goods (₹15,000):
• Voucher Type: Alt+F6 (Credit Note Voucher).
• Debit: Sales Returns A/c → ₹15,000.
• Credit: M/s Modern Retailers A/c → ₹15,000 [Bill Ref: Agst Ref: INV-201].
(Net outstanding balance on INV-201 becomes ₹1,35,000).

3. 20th May 2024: Advance Received (₹35,000):
• Voucher Type: F6 (Receipt Voucher).
• Debit: Bank / Cash A/c → ₹35,000.
• Credit: M/s Modern Retailers A/c → ₹35,000 [Bill Ref: Advance: ADV-01 or Agst Ref: INV-201].
(If tagged against INV-201, remaining balance becomes ₹1,00,000).

4. 30th May 2024: Final Settlement via NEFT (₹1,00,000):
• Voucher Type: F6 (Receipt Voucher).
• Debit: SBI Current A/c → ₹1,00,000.
• Credit: M/s Modern Retailers A/c → ₹1,00,000 [Bill Ref: Agst Ref: INV-201].
(INV-201 is fully cleared and zero balance reflects in the Aging Report).

Part (b): Manufacturing Journal Voucher for 100 Office Chairs:
• 1. Per-Unit Raw Material Recipe Cost:
• Steel Frame: 1 No × ₹400 = ₹400
• Molded Foam: 1 No × ₹250 = ₹250
• Fabric: 1.5 Mtrs × ₹100 = ₹150
• Castor Wheels: 5 Nos × ₹30 = ₹150
• Total Raw Material Cost Per Chair: ₹400 + ₹250 + ₹150 + ₹150 = ₹950.00.

• 2. Total Batch Production Consumption (100 Chairs):
• Steel Frames: 100 Nos × ₹400 = ₹40,000
• Molded Foam: 100 Nos × ₹250 = ₹25,000
• Fabric: 150 Mtrs × ₹100 = ₹15,000
• Castor Wheels: 500 Nos × ₹30 = ₹15,000
• Total Raw Materials Consumed (Source): ₹95,000.00.

• 3. Additional Manufacturing Overheads:
• Direct Labor Cost: 100 Chairs × ₹80 = ₹8,000.00.

• 4. Finished Goods Valuation (Destination):
• Total Manufacturing Cost = Raw Materials (₹95,000) + Labor (₹8,000) = ₹1,03,000.00.
• Finished Cost Per Chair: ₹1,03,000 / 100 = ₹1,030.00 per Chair.
Tally automatically increases the finished stock of "Office Chairs" by 100 units at ₹1,030 each in the designated Godown.